Is it OK to Have a Car Payment? & How To Avoid an Auto Loan

changed again. Yes, like it. This has been something that in the past five years has totally shifted in the reality of buying a car. It makes me feel uncomfortable, although I'm glad we're having this conversation because I have had to shift my opinion and approach and permissions and where I place those permissions. And I think there certainly are still people in the personal finance space who are going to tight fist cling onto things that worked in

twenty twelve. But the landscape has changed, and so we can't really do an episode anymore on how to buy a used car on Craigslist, Like that's just not a thing. So it's how do we if we need to approach car payments. Is it possible to avoid auto loans? What

can we do and what is there space for? So I hope that at least this art cold would do for me what I needed when we were purchasing a car, and that is like recognize and acknowledge the landscape we're now in kind of since the beginning of the pandemic, and how that has shifted car buying and purchasing, and how we can be wise discerning people still implement our frugal nature and problem solving and creativity, but also not railing against the reality and being able to give way

for Okay, now, how do I make decisions in light of what's happening? Yep? But first, if you're trying to save up for a car, try our three day spending makeover.

If you are tired of busting your budget every month and not putting money into your car sinking fund, then our three day spending makeover is for you, because by the end of this three day challenge, you will mind what you value spending on, learn strategies for saying no to the things you don't, and create a plan for guilt free spending that will not leave you broke and

hopefully we'll leave you with a car. So if that sounds like what you need right now, head to Frugal Friends podcast dot com slash Makeover to start the challenge today. We've heard such great feedback from people who have engaged in that, so we're so excited to offer us to you. And it's free. Yes, all right, So cars, this is going to be something that you listen to once every five years if that hopefully. So we're just gonna we're gonna tell you about our past episodes on it. They're

all required listening. Yeah, so this one's about car loans auto loans. We've got episode two thirty three, which is how to save money on your next purchase with the Car Chick. If you are looking at the new landscape for negotiating and saving money on a car purchase, whether you're buying third party or direct, this episode two thirty three is required listening. And then also episode ten, way back, way back, years ago, how to save money on car expenses.

Because if you know us, we are way more about saving money on the big things then we are about scrimping and stressing about the small things. So we know that getting control of your impulse spending and bandwagon spending. That's a big thing. Our other big things are housing and transportation and food, and that's why we do a lot of episodes on impulse spending, housing, transportation, and food.

Not so much transportation and housing, because you don't make those decisions every day, you'll make them once every five years or so. So this is one of those every five year required listening episodes. So two thirty three, ten eighty nine. Yes. So this first article comes from Bank Right and is titled what to Know about Auto loan Debt. And I just even appreciate the title because it is not making a good or bad statement about auto loan debt, which is a great place to start to just remove

the shame from it. What is a good decision for one person may not be a great decision for another, and so we just want all the information to make the best decisions for ourselves. What this article goes through, and we will go through it with you all, is when an auto loan is not a great idea and when an auto loan might be a good idea, So

kind of looking at it from both sides. So first off, when an aut alone is a bad idea is if you can't afford the car, yes, and this isn't just like we don't imagine that most of our listeners are going out there and looking at the Tesla's and the BMWs and the Cadillacts. We know that's probably not you if you're listening to this show, but it doesn't mean even if you're looking at the Toyotas, the Hondas, it doesn't mean that you can afford every single one. And

this is specifically for new cars. There's been a lot of like recently. So one of the changes was is for a time, used cars were about the same price as new cars, and so everyone was like just by new, just by new, just by new. It's not that case anymore. And people are still saying that. Jill and I both have bought cars from dealers. I just bought one last month. Jill years was just like a year ago. So we have heard all of these things, and you're still going

to be paying that. It's back to where you're going to be paying that instant depreciation when you drive it off the lot and it loses two grand. Yeah. Yeah, I think there can be people who get caught up and only looking at the monthly payment versus the overall sticker price of a car, and I think that can push us outside of our budget if we're only looking

at the monthly payment versus the overall costs. And reality is, if it has a high sticker price, you're going to be paying even more than that if you're taking out a loan for it, and what you're going to pay an interest potentially how long you end up paying off that loan. So first look at the overall cost and if it causes just to like a deep sinking pit in your stomach, I mean really all cars probably will

do that. But if you absolutely know this is not going to be a car that is within my lifestyle way of affording things, then don't go with that one. Don't allow the monthly payment to push you into a car that you wouldn't otherwise choose. But then from there, yes, make sure that the monthly payment is something that you

can afford. And so Experience says that the average monthly payment, which is Experience is the credit bureau that a lot of car dealerships will use so they know they know what everybody's car payment is, and for new cars it's around seven hundred and for use cars, it's about five to twenty five. And actually asked when we bought our car, what is the average that people finance, and he said it was about seven hundred. So it's a lot like

that is inching close to rent. I mean, obviously rent is way more than that, but like this then potentially could be your second biggest expense in what might have used to be the third or fourth biggest expense for people. Yeah, and that's where we are. That's yeah, it's definitely the climate that we are in right now. So we don't want to say it can be like it was in twenty eighteen. But you don't have to relegate yourself to that seven hundred dollars payment just because that's what's average.

You also don't want to just take out a clunker. I see a lot of people kind of saying the opposite, to just buy a quote unquote clunker, which don't really exist anymore since the cash for Clunkers program started what like decades ago. So and then you know, so you don't go into debt, but that's also not a wise decision for most people. Well, you also want to consider

the other costs of owning the vehicle. How much are you going to be paying in gas, monthly insurance registration renewals if you live in a state that requires emissions and inspection. That's on top of your monthly auto loan payment. So that is huge to be keeping in mind when you're making decisions and signing papers. Yeah, so you need to be looking at the total cost of the car, not just the monthly. The next is it's not a

good idea if the interest rate is too high. The interest rates for auto loans, they used to be so reasonable, so reasonable, and now they're quite high. So we would typically say that any loan under five percent, you don't have to like set your pants on fire paying off because you can get more in the stock market. That's general wisdom. And it is hard to get that now even with excellent even with an excellent credit score of eight hundred, you cannot get less than a five percent

interest rate on a loan. I know this. So it has shifted a bit, so the interest rates are much higher than they used to be. But so this has become a kind of loan where you do want to focus on paying it off fairly quickly. It is it will be probably a priority even over some student loans. If you're paying off debt and you have to get a car loan, you may have to pause other loan payoffs to focus on this one. But it doesn't Again, it doesn't mean you have to put everything on hold

and stash cash to pay cash for a car. It doesn't mean that either. Yeah, it just means that it will shift some things for you. But one of the ways you can lower that interest rate is to lower the number of months. So like, the three shortest terms tend to be about the same interest rate, so you don't have to take the shortest, but taking a shorter term and putting more down, so pausing other savings goals to stack up some cash to put as much down

as possible. Yeah. The final reason that they state for why an auto loan might be a bad idea or when it's not the best option is if you're going to be stuck with a long term loan. So, like Jen saying, often car loan terms are between thirty six to eighty four months. That eighty four months obviously being way longer, which some might opt for because it makes the monthly payments more affordable. But the catch is you're paying far more in interest and the higher extending. Yeah,

you're extending the life of that loan. So that's another thing to keep in mind. As much as you can minimize the length of the loan getting the best interest rate possible. These are the things that are going to help make an auto loan be a better, more wise decision, and just things to be wary of when in the car buying situation circumstance. Really, if you can't afford the payment at forty eight months or less, then you need to be looking at a less expensive car. So forty

eight months is four years. We all want to say, oh, I'm going to keep this car from a drive it into the ground. You don't know that. You really can't plan to do it, plan to keep it for five years. If you keep it longer, then that is a financial gain. That is a financial success. But if you keep it for less because of an act, accident, or because your family grows or you move somewhere I don't know, then

it is not that much of a financial loss. So really you need to be able to afford everything at for thirty six or forty eight months, So when to get an auto loan. So if you want to build more credit. One of the parts. There are several parts of a credit score, and one of them is credit diversity and an auto loan. If you just have like a credit card and student loan, your you know, experience won't say you're very diverse. But if you add a mortgage and an auto loan, then it says you've got

a diverse credit history. It's not a big part of your credit score. So I don't one hundred percent agree it says it accounts for thirty five percent of your credit score. Sorry, you know it's saying on time payments account for three five pers out was like, that's way more. On time payments are what's going to improve your credit score, no matter what they are. So I would say, do not take out an auto loan for the credit portion of it. Take it out because you want to have

that money allocated for something else. And it is more financially beneficial for you to take out more of a loan than it is to use your cash for that. Now, if you're using your if you take out a loan, so you have more cash every month to buy lattes and shoes, and those aren't your highest priority things. That's not the reason to get out a car loan, But yeah,

I wouldn't do it for the credit reasons. The next reason that an auto loan could be a decent idea or a way to make an auto loan more advantageous for us the purchaser is when we're putting down a hefty down payment, the reference that it's not going to be a great idea to use up deplete all of your savings, especially if it's not a true emergency, just

to circumvent monthly car payments or interest rates. You're better off just making a hefty down payment, putting a significant amount down on the car to reduce the amount of the auto loan that you need to take out, and then being able to keep some of that cash on hand for the other unexpected emergencies. This is one of the things that I was saying was so difficult for me to kind of overcome in my mind when I realized the car buying situation is different than it had

been for the majority of my adult life. I am so accustomed to paying cash in someone's backyard for their used vehicle, just kind of a private sale person to person. We found it on Facebook marketplace and we could walk away with a car between six to twelve thousand dollars and that was a reasonable amount to pay in cash.

Those days are over, and this hurts to say, unless you're unless you're okay getting a car that's like ten plus years old, like that would be very Yeah, it's even still the amount of money that you still have to pay versus what it's actually worth and how long that car is going to last you. So then it was okay, But am I willing to pay now thirty thousand dollars even for a pre owned vehicle? And then I started to face the reality that that's not a

great idea to do. If I have thirty thousand dollars of cash. You're assuming we are not independently wealthy. If you've got stacks on stacks, then shirt fine, do whatever you want with thirty k. That probably feels like chump change. But for someone like me who makes a very average salary household income, if I have thirty thousand dollars stacked away, that's not going to be the best use of that just to avoid a monthly car payment. So I really

had to reorient myself. Similar with our renovations, like there comes a point where it makes sense to cash flow, and then there comes a point where it makes sense to borrow money. This is just like my realization and hot take, especially when it comes to investing and saving for retirement, our money can go further, especially for US medium income earners. We need more time too, safe for

retirement versus shoving all of our money away. There's definitely emotional decisions at play here too, and you're going to need to make your own decisions for what's going to make sense for you. But this was the big thing for us of Okay, it's just not even if we had it, this would not be a great idea to

put all of that money towards a new vehicle. But the workaround for us, just like this article is suggesting, was putting a decent amount of cash down so that the amount of the loan that we had to take out was significantly less. Yeah, I totally agree. It is. It is a different landscape and it is not as bad as what it was a year and a half ago. So we have to get out of that to that like kind of despair that you know, we're just going to have to spend thirty forty grand on a car

that's just what it's going to cost. No, because I was just in there last month and got a three year old minivan like great stuff for twenty five. So it is a choice. Ultimately, did I have to get the kind of car I want? Could I got in a Sedan for less? Yes? But also I wanted the doors that opened automatically with a button, you know, So

there it is. This is a super personal decision. Yeah that I think we have to weigh all of our other life circumstances up against what is the reason for purchasing a new car, What do the rest of your finances look like? What are your other big goals to do with your money in the next few years. Like all of the answers to those questions are going to shift it for each person, you know. For us, we were in an emergency situation. We had one vehicle, that

vehicle's breaks went out, like what to do now? So and for others it might be well, yeah, I don't love the landscape, and I could wait another one to two years and stash up even more cash for this to pay down, you know whatever the auto loan might be.

So lots of different directions we could go. I think The biggest thing I want to highlight with this is being aware of these pros and cons that this article is highlighting when it's not a great idea, when it could be a great idea, and how we can make the most of that situation. Yeah. The last thing on this list and to get alan is when there's a deal on financing, and that's mostly for new cars. So I'm not gonna, I never will probably recommend a new

car for anybody, and that's just personal. There's some people that a new car is a high value for them and they will pay that And so if that is you, then finding deals on financing, especially at the end of the year, they have some good deals that that could

be useful to you. But I would say the best thing on this list is when you have the cash reserves but you need them for something else besides putting them all into a car, especially if I mean in this kind of don't I hate saying like in this economy, but it's a good it's a better idea to have your money in your bank and have a car payment, then have all your money tied into a car and like no money in savings except for your you know, two to five grand in an emergency fund. That's that's

not a smart move. So I think that's the best reason to get an auto loan. And so yeah, now we're going to head into our second article. Yes, so this next one is how to avoid taking on too much car loan debt. And I don't know if you could have inferred it from the first article, but both Jill and I have auto loans. We'll let the cats out of the bag open. We're starting the lightning round early. We both have them. Yeah, so that does not mean that we love debt, contrary to popular belief, or that

we're telling you to get an auto loan. If you can find a workaround, go for it. But we also want to help create permission for this because it's different times. Friends. Yes, and this just might be the reality of what needs to happen. If we're not living in a city where we can take public transportation or yeah, or you're in your early twenties and you can afford that fifteen year old sedan and that's good for you, then that's great. When when you are at different stages of your life,

different things become priorities and you follow those. So what's right for me may not be right for you. And but just because one person says something is gospel doesn't mean that it is. You got to take with a grain of salt where it's coming from. And so we don't we don't want to do that. We really want to just talk about ways to get creative no matter what situation you're in. So this article comes from Finder and they say how to avoid car own debt, or most of it really is like how to not take

on too much car loan debt. They also talk about how to pay off your loan faster. Some of the benefits of a car loan can be what to watch out for. So it's definitely chock full of some helpful things. I would recommend checking it out if you are currently in this process. We're just going to go over some

of the bigger highlights of it. The first thing that stood out to me under the category of how to avoid too much debt is to do your research, so knowing the type of vehicle that you want and then spending a decent amount of time on the internet and in talking with people to compare specs and pricing. Of course, the internet is going to give you the most information

as far as what to expect with pricing. What is that same year with that type of vehicle with all the different specs, the type of engine that it has, all of those things, and what can I expect for pricing, Like you'd be surprised if you haven't done this recently, how much it can vary from dealer to dealer what they are selling that same type of vehicle for. So that's just some basic information that can help you to

avoid getting hosed on some of the pricing. To have a really good idea for what can I expect to pay what would be a reasonable amount of money for this type of car? Yeah, and I would say pay specific attention to fees. So I used True Car and I was able to inquire about pricing on cars and then get a breakdown of car fees, you know, dealer fees, etc. And there are some dealers and I'm going to get more into this in the lightning round to where you

have a story. So there are some dealers that will just charge their dealer fee and it's a thousand bucks and you can't get away from that. That is that's something all other fees are negotiable, and if they won't negotiate them with you. You can go to another dealer with more transparent pricing, and you should, Yeah, because there are enough dealers out there today that have caught on and are just charging their transparent price plus their dealer

fee and they're being open about it. There are enough of those dealers where you can go buy from them. You don't have to be subject to these dealers that are still charging like fifteen different fees that mark the price. Your time is on your side. I would recommend taking a couple of weekends to shop around, to test drive, to research, to compare, and not just making impulsive massive

car decision. Yes, absolutely so. The X one on this list is that I will talk about is to compare your financing options, so it behooves you to get pre approved for an auto loan before you go in. You don't have to have the car. I would say, take whatever your budget is and add ten grand to it and just get pre approved for that. Not saying that

you should expect to pay ten grand over budget. I'm just saying, like, get pre approved for it because the credit unions will be offering the best terms for a car. So if you're not a member of a credit union. Now is the time to join one, And I would call the dealers that have cars that you're interested and ask them what credit union they have like a direct relationship with. So when we went in, we were actually lucky enough that the credit union that we use regularly

is the credit union that these dealers had. The two dealers that we checked out had a direct relationship with, so we were able to I was already a member, we were able to do the financing right in there. I got preapproved through the credit union, but it was easier just to take out that same credit union loan with the dealer. It's the same loan, it's just I didn't have to get a check from the credit union

and bring it in sort of things. But they honored the rate that I got, and they actually honored the new car rate that I was approved for, yeah, instead of the used car rate. Used car rates are usually higher, So that was really really great. Yeah, so definitely do

your research about credit unions. Become a member at your local one, the one that has the best rates currently on used cars, and they will typically when you go in there, even if it's not the same credit union or the same bank, they will honor the interest rate on that term with any other thing, because they want your business and they want to do the financing in house. They want to get it done right then and there, so they're going to honor whatever you've been preapproved for. Yeah.

The other way, obviously, to avoid taking on too much debt with a car is considering the less expensive car option or used cars. Just like John already said, we will recommend used, certified, pre owned, whatever you want to call it, where you're not immediately experiencing the impact of it depreciating when you buy brand new and drive it off the lot and it loses ten thousand dollars worth of value. You don't need that, of course, make your

own decisions. But if you're wanting to look at, how can I reduce this cost as much as possible, the vehicle without all the bells and souls, the vehicle that's been used, and you can find some great ones when it doesn't mean that you're buying a super old car. There's plenty of people out there who lease vehicles for a couple of years, hardly put any miles on it, and suddenly it's a pre owned car that feels brand new to you. Yeah, exactly. So the other one's on

here kind of reiterate what we were talking about. So avoid spending more than you can afford. This one says avoid loan terms that exceed five years. I go with four because I'm more conservative. Usually the three and four year terms are going to have the same interest rate, so double check it. Though. If you can get a lower interest rate with a thirty six, you want to go with that one, even though it's a higher monthly payment. But if they're the same, you need to at least

be able to afford the four year one. Yeah, and sometimes even when we were in there, three, four and five, if we're the same, it was when you went above five that the interest rate increased. And if you do happen to need to take on a loan that does have a little bit higher of an interest rate than paying off the loan faster is still an option for you.

Even if you signed paperwork for a four to seven year loan, that doesn't mean that you can't pay it off sooner as you come across the room and your budget to be able to do that. Of course, making that sizeable down payment is going to really help. Looking at when you can make lump some extra payments to it. Even tacking on a little bit each month or breaking your monthly payment down into two times a month can also help to pay down the principle of the loan.

Even looking at refinancing once you're in a different place can be a really great idea to see. Okay, if interest rates are shifting, then it could be worth your while to refinance for a lower interest. Yeah. Credit unions can also refinance auto loans to get that right down. So maybe you're making payments for a year and your credit increases, maybe fingers cross, maybe rates decrease, I don't know. So if the stars align and you're able to refinance,

then definitely try to do that. But I think you are going to get the most bang for your savings buck by going with a car that you can afford the three or four year payment. So just basically getting a less expensive car. Is that going to take more time to find? Yes? Are they out there? Absolutely? Absolutely. It does not have to be and be flexible, like don't you don't have to get like a junker to

be flexible. That is something that I learned because really for me when we were shopping it for me, it was like the line, and for Travis it was bottom of the line, and we really had to come together find that radical You really had to find that radical middle. And it ended up in an affordable vehicle that had ninety five percent of what I wanted. And I'm very,

very happy with that. With the loan, do you know what has one hundred and twenty percent of what I want And I'm happy with all the time, always and forever. Oh my gosh, it would finance till the day I die if I needed to, but would never have to. The Bill of the week. That's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage. Maybe your card died and your you

to not have to pay debt bill anymore. Build Buffalo bills, Bill Clint, this is the bill of the week. Hi, Jen and Jel. This is Amanda calling from New Brunswick on the East coast of Canada and I just pressed submit on my final bill for my Capital one master card. I paid over seventy five hundred dollars in six months and today it's the beginning of January twenty twenty three and I did it. I'm so excited. Thank you for all of your health and I have just changed my life.

Thank you so much. Bye. Oh yeah, Amanda, congratulations. That seventy five hundred in six months. That is insane. And that credit card debt is the debt to get out of there. And that's the debt to get out Like your pants are on fire. That's over a thousand dollars that you pay through at this credit card debt. And well done, Amanda. And I'm glad that you chose to celebrate with us in the Bill of the week. Yes, I love it. I love it so so much. Thanks

Amanda from New Brunswick. If you all listening, happened to be another Canadian listener, or you know you're just from the United States, want or any other country, Oh, we love it. We love it when you call from all over the world or outer space. That'd be fun. If you've happened to pay off debt or lower a bill, or you're happy about a bill that you paid, or you know me. Your name is Bill. Visit Frugal Friends

podcast dot com slash Bill. Leave us your bill. We're here for it and for you, and now it's time for blay round Sally. You know, we got a four star review the other day because our intro music is corny. Yeah, I know that makes me happy. I am pleased by it. I've never had a bigger compliment in my life. Oh yeah, I think they probably just meant to a Yeah. Yeah, I know it was an accident, But thank you for the corn. We like corn. Yeah, all right, so we're

gonna Oh, this one is so juicy. You've been waiting for this, and I talked about this story on an after show in a previous episode, but you all are ready. Your golden tip for a first time car buyer, Jen, give it to us juice? Okay, corn juice? All right, that's weird. Okay, So my tip for a first this okay, I'm not even it's not even first time. It's for

everyone in this climate right now to RECOGNI niye. Sunk cost bias, say more so, sunk cost bias or sunk cost fallacy is common in frugality or even in personal finance, where is because I have sunk time or effort into this, I will not give it up, even if by the law of diminishing returns, it is no longer returning what I am putting into it. It is valuing the time spent or the energy or effort spent more than the

actual outcome. Give us an example. So I bought a car recently, and I really wanted this one van that was at this one dealership. But I didn't want to just go to that dealership. I wanted to test something else. So I found another van that was very comparable at a dealership closer, and I just went in to test drive and get the experience before I went into this other one. So I went in, test drove it, did this all by myself too, and uh, and then left

and that was I gained the experience. I got their deal, and that's what I thought, you know, okay, cool, this is this is the experience. Now I know. And next day I go to the dealership with the car I really want. And and mind you, these cars, these vans that I test drove, were the same exact price online. Wow, they were both twenty five ka. I think there was maybe a five dollar difference between one was like twenty four nine nine nine and the other one was twenty

four nine nine five. So four dollars, yes, yes, yes, So I went to the dealership with the one that I really wanted. And the difference between these car these vans was the one that I test drove the first day was a few years older but had less than half of the miles. Okay, so this one, so this one that I really wanted. It had more miles um, but it was newer, and it had the luxury like package.

It had the leather, it had all the features. You know, more miles but more mile interesting yea um, but leather lea. So but this is the one I really wanted. So I go in test drive and then I sit down at the negotiating table and I'm ready for this because I've listened to the episode with the car check, and I've written the ebooks on negotiation. I know how you are prepared. Your sleeves are rolled up. And they don't They absolutely don't know what's coming for them because they

put all of these fees. So when I was talking about hidden fees and fee transparency, while the first dealership was like, this is the price, and this is our dealer fee, and this is the this is it, this is it, and I was like, yeah, a thousand dollars

dealer fee that's standard this place. Oh, and then I had my trade in that they gave me the value for this place had a reconditioning fee, which was basically me paying for them to get the car ready to sell, which I thought was ridiculous and I called it superfluous, and they hated me for that where they kept using and I was like, they wanted to give you a four story The manager was like, I would describe as ancillary, and I was like, oh no, it's superfluous. It's like

I know words. And so they had that feet and then they had my trade in value, but on the sale, like the deal sheet, they took off two thousand dollars from it because the car was over eighty thousand miles. So instead of just giving me a fair and transparent value of my car, they were trying to deceive me by giving me one by made me think I was

getting more from my car but actually was getting less. Yeah, and then they had another like bonus that canceled out a fee and another but so they had another fee, but then they gave me a bonus to cancel that out, and so it was just so murky yea to where by the end of it I spent an hour and a half negotiating with this dealer for this van that I really wanted, and the whole package came out to four thousand dollars more than what I was going to pay for the other van that I had seen the

day before, with absolutely no negotiating, right, and so I was very close to signing the papers for that van, very a more expensive van. When Travis and I looked at each other and we were like, what are we doing? I realized that I had let the sunk cost bias, the time that I had spent negotiating, the time that I had spent desiring and thinking about this car. I had let that sunk cost bias almost lead me to paying four thousand dollars more yeah than an almost identical yeah.

And you're not alone in that no, but that one decision two. I mean, we we had like signed the deal and I was about to give them my social Security number I think I had, but we hadn't signed any papers to like buy the car yet. We just you know, signed off that the deal was final. We got up, we left, thankfully. You had the excuse, like, we gotta go pick up our kit. I did. We

did use that. I mean, we did have that excuse we had to go pick up Kuy, but that decision as uncomfortable, it was as it was, and I felt bad for wasting their time. Yeah, which is so silly.

I felt bad, but I it saved me four thousand dollars. Oh. If this is such a thing to keep in mind with any purchase, any big purchase, whether a home purchase, an investment purchase or renovation purchase, car purchase, Like, we can find ourselves kind of paying more or buying something you don't even want because of that sun cost bias

that can come upon us. Yeah, I think it's helpful in listening to your experience, even thinking about having an additional person there, like the fact that you had Travis to also look to and say, wait a second, like just that checkpoint, so you can kind of alert each other to Oh, I think this is happening. I think

this is happening. What about this? What about that, whether that's a spouse or a friend or a parent, somebody else with you, Because we can get sideswiped by sunk cost bias or just people, Yeah, dealerships or the seller kind of pulling one over on you or talking you into additional packages that you don't need. Like there's just

the decision fatigue factor too. Yeah, yeah, And it's worth buying a friend dinner if you don't have a partner who's very money conscious, somebody who is a third party who you respect their financial savvy, bringing them with you and just buying them a really nice steak dinner when it's all done. That could I mean, that could almost be even better than bringing a spouse because they're not emotionally invested, so like they may not even feel as bad to like question the dealer on well what about

this cost? What about that cost? Because they're not the ones purchasing the vehicles. It's a skin off their back. And this can be overlooked when we are jumping straight into financing a car and getting an auto loan, because four thousand over four years broken up into twelve payments is not a lot. But we want to look at

the total cost to own. That's what we said upfront, and that's what's going to make the biggest difference when you are focusing on the total cost to own, not the monthly payment, and that's going to save you the most. That is, and we may not be able to pay the full amount, or may not want to pay the full amount, may want to put that money into other places. But you can still save a lot on your car and your auto loan by looking at that full price.

Because that's I calculated six hundred and sixty six lattes that I don't have to feel bad about turning down. Yeah, yeah, you know, so that I have alleviated over six hundred decisions from my life by making the right decision one time. Yeah. The tip that I would give to people purchasing a car first time or otherwise, definitely by used. We've talked about that already, and definitely do your research, not just oh what's the pricing across the board, but your research

on the cars in as unbiased way as possible. So rather than searching just for example, like is a two thousand and six Subaru Forrester reliable? You're gonna get the answer like that's you're going to get the answer that you want on the internet. You can get the answer that you are anywhere. And so of course, if that's the way you're asking it, people are gonna be like, yes, I love my Subaru Forester, it's so great. But if you ask, what are the issues with a two thousand

and six Subaru Forrester or any vehicle. I'm just using my personal experience as an example. She had a really bad experience with Forester. Yes I did. Then then you are going to get the answers from the people who as you see themes of what is the issue that that car had? Am I willing to take on the

repair costs for whatever those issues might be. And also recognize that you need to do your research on the specific type of car that you're looking for, not just the make and model, but the year as well, because there could be a make and model of a vehicle that across the board is really decent, but that particular year two eighteen is the year that X y Z went on the car, and it could be why you're finding such a great deal on that year of that

car is because it's experiencing that issue. So do very specific type of research. And I think one of the things that I see people who are not super knowledgeable on vehicles do again, whether first time car buyers or otherwise, it's just like identifying a car that they think that they like and like going with that, rather than doing research on what are the best vehicles on the road, What are the most reliable makes and models of vehicles?

And asking friends like chances are each one of us has someone within our circle who is more of a car expert than we are, and ask them, Hey, what do you think? What do you know about this type

of vehicle? So picking, you know, asking people within your community as well as doing your own research rather than just getting your mindset on one particular car, because it really could be that there's a lot of issues that come up with that vehicle or it might not be the best for you for X y Z reasons and just when in doubt by a Toyota. Yeah, unless it's

a twenty nineteen Rev. Four. But so and if you take one thing away from this episode, let it be this, Start atcar complaints dot com so you don't have to worry about your googling skills. Start atcar complaints dot com.

It compiles user generated complaints on the site and then also the National Highway Transportation Safety that the complaints there as well, and it will tell you make and model, which of the years have the most complaints, what the complaints are, which of the years have the least complaints, and you want to take the newer years with a grain of salt because they have fewer years to be

able to accumulate. But if you're like me and you're looking back, and I'm like, I wonder, what's uh twenty sixteen Hunday twoson is compared to all the other Hunday two sons and finding that it's one of the five worst cars like that year and that model one of the five worst cars Hyundai has ever produced. And you won't know that unless you purchase the car, or you do your research ahead of time. Much better do your research than to find out the hard way car complaints

dot com. They don't pay us to say that, but they have paid me so many times over from the money I say, thanks everyone for listening. Many of you know that we have a membership for our listeners who are paying off debt, and we do monthly money challenges just to keep it fun, because if it's not fun, it's not frugal. Friends. We have accountability groups where you can get all that community and motivation and staying on track with your finances. We want to congratulate one of

our members for a recent big win. This comes from Candice who shared that she made her first Poshmark sale, saying, I'm so excited. Only a week after listing two reposh items, I sold my first item. Today. I'm sending earnings twenty dollars to my new emergency savings account and we'll list some more items today. I have a bunch of nearly new items that I only tried on Yeay, Candice, Yay.

Congrats Candice, you are crushing your saving schools. No, this is so fun when we find new ways to kind of not only minimize and simplify, but then also make money off of those things. Poshmark can be a great site for that. Thanks everyone for listening. If you want to check out our membership, we have all kinds of courses that help you get better with your finances, interviews, challenges, so much more. Head to Frugal Friends podcast dot com slash club you can check it out see if it

would be a good fit for you. We'll see you next time. Ye Frugal Friends is produced by Eric Sirianni